# problem code : 16609MACRO Classic List Threaded 6 messages Open this post in threaded view
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## problem code : 16609MACRO

 In the country of Tropica, output is growing at a rate of 5 percent per annum: delta Y/Y  =0.05. Also, the savings rate in this country is s = 0.10, and the depreciation rate =0.05. What should be the capital output ratio so that the economy is consistent with the Harrod- domar growth model? Consider the situation above with a Solow model. Let the production function be y = k^0.5 where y= Y/L output per worker, k =K/L capital per worker. In the steady state what capital-labor ratio (k) would you expect to observe in the country? Assume delta L/L = 0.04 Suppose another economy which is characterized by the production function y = A(k)^ ½  , where y =Y/L is output per worker, k = K/L is capital per worker, and A is a productivity index. Given that the rate of growth of output per worker deltay/y = 0.02 and the rate of growth of capital per worker delta k/k = 0.02. What is the rate of growth in productivity? (source : prof. Tybout)
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## Re: problem code : 16609MACRO

 capital output ratio=1 K/L ratio=1.234 (k^.5=10/9) the last part i am not sure about
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## Re: problem code : 16609MACRO

 In reply to this post by vishruti capital output ratio is 2 second answer is correct third answer is 0.01
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## Re: problem code : 16609MACRO

 for the capital output ratio(q), isnt the equation: q(1+g)=q(1-d)+s where, g=0.05 d=0.05 and s=0.10? and how to solve the last part? thankyou
 In reply to this post by vishruti plz tell how u did q2..??? 